Why not, it's too forgivin in many ways - it enables quick and dirty coding and coding by hacking.
Well, yes. If the students discover the software by themselves and the teacher won't oversee their works/projects (even the ones they make at home) this can be a problem. But this can be a problem in any environment in my opinion.
PPS: scratch is a much better learning tool for coding than C2
One of the big differences is that Scratch is a LPE (learning programming environment), so it was designed to teach programming. While C2 is a game engine and it was designed to create products with it. The thing is, that C2 is so easy to use that it can be used in education too.
But if a student won't go forward to a university or won't extend his/her knowledge in programming then staying with the software they learned with can be a big difference. It's unlikely that a high-school student will learn how to code a software from ground up in school using traditional languages. Let's say the class learned with Scratch. The student will be able to create small projects and share them online for remixing. But if they used C2, then the students can make games or apps, so it's not necessary for them to move forward if they are the designer types. Most of the students won't learn coding by themselves and most of them won't even practice what they learned.
I'm not saying that C2 can be the solution for everything, I'm just throwing some thoughts in. However I'd be interested in why did you say that Scratch is the better tool for learning (even if it is, even if it's not). Can you elaborate?
That reminds me my college times . Kinda hard times but fun when I look back now.
These time are always fun to look back. But when we were there... wasn't so funny.